A civic outcry in Malaysia forces a Chinese builder to live up to its eco-friendly tag

Forest City, a massive land reclamation project built by a Chinese developer and backed by the sultan of Johor state in Malaysia, was initially allowed to begin construction without a detailed environmental impact assessment.

Facing public protests, and concern from neighboring Singapore, the government halted the project and required a laundry list of design changes to the city, which is projected to house 700,000 people upon completion.

The project is marketed as an eco-friendly “future city,” but has been met with concern by environmentalists. China’s involvement has also caused political problems, including an announcement in August that Malaysia will not allow foreigners to purchase property in the development.

This is the final installment in a six-part series on infrastructure development in Peninsular Malaysia.

JOHOR BAHRU, Malaysia – On Jan. 1, 2014, fishermen near Kampong Pok, a village on Malaysia’s southern shore, were alarmed to find a fleet of barges and dredgers dumping sand on their fishing ground. Up until that moment, they’d heard nothing about land reclamation planned for their neighborhood.

Over the next few months, they would begin to learn about the scope of the development scheme planned for this shallow expanse of shellfish beds and seagrass.

Country Garden Pacificview, a unit of one of China’s largest real-estate developers, had quietly partnered with the Johor state government and Ibrahim Ismail, the sultan of Johor, to build a “21st century city” on a 19-square-kilometer (7.3-square-mile) man-made island in the Strait of Johor. Village leaders alerted media in Johor Bahru, the state capital. They also contacted reporters in Singapore, located just across the narrow strait. Singapore, which is extremely sensitive to any effort to crowd the waterway dividing the two nations with a new development, and especially without any prior notification, issued a formal request for information.

New information quickly emerged. According to local media reports, Country Garden had paid the sultan and the government $55 million and gained the right to purchase and construct the man-made island that would be big enough for a city of tall towers and 700,000 residents.

Country Garden disputes the $55 million figure, which was cited by the Malaysian Insider, but “cannot divulge a specific breakdown, as it is bound by business confidentiality obligations,” said company spokesperson Eileen Ho, in an email.

The state and the sultan of Johor hold a 34 percent stake in the project, with the latter controlling the bulk of that stake. Country Garden had been allowed to proceed without a detailed environmental impact assessment or any of the required reclamation permits.

Johor permitted the project even though the new island would smother sensitive seagrass beds and endanger the Pulai River Mangrove Forest Reserve, one of Malaysia’s largest mangrove ecosystems. In 2003, 91 square kilometers (35 square miles) of the Pulai River mangroves that lie close to the reclamation were classified as a Ramsar site, an international designation to protect wetlands considered globally significant.

About half of the first manmade island has been reclaimed from the Strait of Johor. Forest City lies across the strait from Singapore, a city-state highly sensitive to development in the narrow strait that separates it from its much larger northern neighbor. Image by Keith Schneider for Mongabay.

So began the development of Forest City, perhaps the largest mixed-used real-estate project in the world.

Country Garden and the state of Johor market the project as a new design for energy-efficient, ecologically sensitive, land-conserving, low-polluting offshore cities of the future. Whatever their grand ambition, Country Garden has been busy for four years trying to clean up the regulatory, political and publicity mess produced by Forest City’s rough start.

In June 2014, six months after the fishermen discovered the reclamation, the Malaysian Department of Environment issued a stop work order pending completion of an approved EIA. A month later, Country Garden announced it was downsizing the project by a third, dividing it into four islands, and taking a host of other steps to demonstrate its project would be a showcase of ecological sensitivity.

Buildings would be constructed with state-of-the-art, waste-reducing practices, they said. Along with promises to restore mangrove forests and seagrass beds, the company said it would establish new habitats for prawns and fish. In response to concerns about sea-level rise, Country Garden said it was putting all of the built environment on top of huge concrete platforms high above the waters of the strait. It hired respected Malaysian scientists to regularly monitor water quality and restoration projects, and make their findings public.

Country Garden also spent $25 million to compensate some 250 fishermen for losses in their catches, and has actively been involved in financially supporting schools and an environmental education program in Kampong Pok.

In January 2015, the national government approved the environmental assessment. It required Country Garden to abide by 81 separate ecologically sensitive directives. Two months later, construction resumed.

Despite the political and civic pressure, hundreds of potential buyers stream into the Forest City sales center every day. Image by Keith Schneider for Mongabay.

Has Country Garden’s work to repair its missteps been sufficient? Researchers who have studied the project closely have mixed assessments.

Serina Abdul Rahman wears a number of hats as an area resident; a highly regarded conservation scientist at the ISEAS – Yusof Ishak Institute, a Singapore-based think tank; and co-founder of Kelab Alami, an environmental education group supported by Country Garden. “Forest City does try to offset the damage that they’ve done to the environment by supporting the local community around them,” Abdul Rahman said in an email. “Those are the people most affected by the development. This level of engagement has not occurred in the community before.”

Joseph Marcel R. Williams, a graduate student in planning at the Massachusetts Institute of Technology, studied Forest City and prepared a paper two years ago that reached this conclusion: “The sheer time scale of the development — estimated at 30 years — poses the greatest long-term risks. Intuitively, marine ecosystems can sustain stresses for limited periods of time and recover, but nowhere near the time needed to construct new islands housing several hundred thousand people.”

“It’s probably safe to say that Forest City has contributed to the loss of important habitat and presents some serious financial risks to the region if it is abandoned or unfinished,” Williams added in an email to Mongabay. “[Megaprojects] often over-promise economic benefits while operating outside of traditional planning and democratic processes. In this case, it appears the sultan of Johor has strong involvement and has helped shepherd the project past environmental review and regulation that might have easily stalled other such initiatives. ”

The scale model diorama of Forest City displays an ambitious urban development strategy that Country Gardens views as a model of sustainability, and that critics assert is a threat to Malaysian stability and the marine environment. Image by Keith Schneider for Mongabay.

A Big, Big Idea

Governments plan on paper. Film directors prepare on storyboards. Architects design on computers.

Developers are different. They build dioramas: finely detailed, three-dimensional scale models of how a project will look when it’s finished. The bigger the diorama, the more certain developers are that they will succeed.

One of the most expansive dioramas in Asia occupies some 930 square meters (10,000 square feet) of floor space in the sales center at Forest City, displaying scale-model buildings taller than a man.

The diorama is big because Forest City is big, and not just in area, numbers of residences and projected population. Its Chinese developer is set on proving Forest City as a dense, walkable, clean, environmentally sensitive urban design for the 21st century.

It’s an urban development vision reminiscent of the Futurama diorama built by General Motors for the 1939 World’s Fair. The giant GM scale model, seen by an estimated 10 million people, was the first public display of ribbons of elevated highways and clusters of tall downtown office towers surrounded by retail centers and office parks in leafy residential suburbs. Futurama, in effect, was the template for suburban sprawl: the auto-oriented, energy-gulping, expensive civilization that GM and its industrial allies envisioned as the dominant metropolitan design for the last half of the 20th century.

Forest City, say its developer and master planner, could have a similarly outsized influence this century. With 16,000 residential apartments built and sold since construction started on the first island three years ago, Forest City is already the largest private mixed-use real-estate project ever undertaken in Malaysia.

If market conditions and demand persist as they do now, when the new city is finished in the mid-2030s it will encompass three more man-made islands and be a $100 billion oceanfront urban center with 200,000 more residences, perhaps 200,000 jobs, thousands of offices, hundreds of retailers, dozens of manufacturers, hotels, schools, parks and healthcare facilities.

Some 700,000 people will live there, about the same number of residents as Seattle. Country Garden projects that residents and workers will get around on foot, bicycle or a network of electric trams. The developer is seeking Greenmark certification for Forest City, a rigorous measure of sustainability, efficiency and pollution abatement awarded by Singapore’s Building and Construction Authority. Most striking is that Forest City’s four islands will total 13.9 square kilometers (5.4 square miles). Seattle’s city boundary encompasses 218 square kilometers (84 square miles). And the company asserts, in a critical difference for mainland development, that it did not need to move any homeowners out of the way.

Ng Zhu Hann, Country Garden’s head of strategy, sees Forest City as an opportunity for Malaysia. Image by Keith Schneider for Mongabay.

“So far we have invested $2.5 billion in this project,” said Ng Zhu Hann, Country Garden’s head of strategy. “We are one of the five key national strategy gateway projects in Malaysia. We are a private company building a city development. When we are finished Malaysia will be pleased by what we did here.”

That depends on whom you ask. Forest City’s almost unfathomable size and ambition have prompted considerable attention and critique in and outside Malaysia.

“Being impressed by the scale and ambition of Malaysia’s Forest City mega-project is a completely natural response,” Steve McCoy, a sustainability consultant in Kuala Lumpur, said in an email. “The sheer audacity to first build four artificial islands where there were none, and then build a city for about 700,000 people on top of them, is as good an articulation as any, of the way we have become adept at molding our environment to the shapes of our imagination. And it lends itself nicely to our culturally-conditioned belief in a never-ending process of growth and human progress!

“However the claims to be a ‘eco-smart city of the future … where urbanism and sustainability form an equilibrium’ or that the project is ‘set to trigger great changes on how development projects will be carried out throughout the world in the future’ do not bear up to scrutiny, in my view.”

Environmentalists and fishermen, meanwhile, have expressed urgent concerns about the consequences of island construction on the marine ecology. The critique is buttressed by the early hubris that Country Garden exhibited in trying to launch in 2014 without public notice. Marine scientists in the region also anticipate significant environmental consequences.

“There definitely will be impacts from the scale of the reclamation,” Chou Loke Ming, a marine biologist at the National University of Singapore, said in an email. “Since it is a narrow waterway with a political boundary that separates Malaysia and Singapore, transboundary impacts can be expected.”

Competing developers worry about the effect of Forest City’s ample supply of space for apartments, stores, hotels and offices on softening real-estate prices in southern Malaysia. Economists at Bank Negara Malaysia, the nation’s central bank, issued similar concerns when they warned last November of the largest oversupply of residential property in the country in a decade. The highest number of unsold units was in Johor.

The 283-room Forest City Phoenix Hotel opened nearly two years ago and has stayed busy with guests. Image by Keith Schneider for Mongabay.

Other concerns are unique. China’s authorities were so unnerved by the number of their citizens buying apartments in Malaysia and elsewhere that the government last year put a $50,000 annual cap on how much buyers could spend outside the country. That’s less than a third of the cost of a two-bed, two-bath Forest City residence, but enough for a down payment and regular mortgage installments.

Malaysian national leaders had a different set of objections. During the national election campaign that ended on May 9, then-opposition leader Mahathir Mohamad, now the prime minister, used Forest City to tear at the scab of lingering Malay-Chinese cultural resentment.

He said the sale of offshore land development rights to a Chinese company could expand China’s growing sphere of influence in Malaysia.

In August, Mahathir emphatically clarified his opposition. He announced his determination to ban foreign buyers from investing in Forest City residences. “One thing is certain, that city that is going to be built cannot be sold to foreigners,” Mahathir told a news conference in Kuala Lumpur. “We are not going to give visas for people to come and live here. Our objection is because it was built for foreigners, not built for Malaysians. Most Malaysians are unable to buy those flats.”

Country Gardens responded that it had received all of the approvals from the state and national governments to build Forest City. The Mahathir administration also appeared startled by the prime minister’s proposal.

Banning foreign buyers is “still undecided,” said Zuraida Kamaruddin, the minister for housing and local government. “We must assess (the situation) and then provide the prime minister with a report,” she told the Malay Mail.

Construction proceeds 24 hours a day at Forest City, already the largest mixed use development in Malaysia. Image by Keith Schneider for Mongabay.

Country Garden disrupted

Despite the government’s opposition, construction at Forest City advances at characteristic Chinese warp speed. The din of growling earth movers. The rattling and pounding of steel against concrete. The positioning of barges, and the noisy, dusty convoys of ceaseless truck traffic hauling sand: it’s the soundtrack of an immense 24-hour, 365-day construction site that erects tall towers by the dozens.

“Country Garden is creating a new global city. It is meant to be a city unto itself and not just a development,” said Michael Grove, the chair of landscape architecture, civil engineering and ecology at Sasaki, the Boston-based planning and design firm that developed Forest City’s master plan. “The suburbanization of peninsular Malaysia has traditionally been in car-centric, low-density development that destroys rain forests, displaces agricultural lands, and changes the coast line. Lush tropical mangroves are often deforested in the name of suburbanized development.

“Our intent was to concentrate population on Forest City’s reclaimed islands to shift the land planning trajectory to protect coastline and inland rain forest and save agricultural land. The idea is to attract people to live in a high-density environment connected by transit, to get people to shed their cars and live in a clean urban environment and community. Hopefully that’s what will happen.”

Serina Abdul Rahman of Kelab Alami, the environmental education group supported by Country Garden, lives in the Tanjung Kapung district, just across from the construction site. One of Forest City’s most prominent critics, she emphasizes the need to remain cognizant of the downsides of the project. “While Forest City is portrayed as a role model for future cities, especially in its application of green technology and environmental sustainability, the land reclamation that underpins its existence is doing serious damage to local seagrass, mangroves and fishery habitats,” she wrote in a paper last year for the ISEAS – Yusof Ishak Institute, where she serves as a research fellow.

Among the regions in Asia contending with intense development pressure, the Strait of Johor ranks near the top. While it’s attracted the bulk of attention and criticism, Forest City is by no means alone. At the strait’s eastern entrance, Malaysia is building a $22 billion petroleum processing, storage and transport complex on 61 hectares (151 acres). Across the strait, near the western entrance, Singapore is building a 387-hectare (956-acre) deepwater port. Sembcorp Marine is constructing a 206-hectare (509-acre) shipyard. In between are dozens of high-rise residential developments.

The big industrial projects, like Forest City, are being built on man-made islands, a development practice that has attracted interest from builders in Malaysia and alarm from marine ecologists and fishing communities. Sand has emerged as one of the country’s most economically valuable and ecologically hazardous natural resources.

Some 200 men and women work in Country Garden’s $125 million, 780,000 square-foot industrial building systems plant to produce prefabricated concrete and steel walls, staircases, and other pieces for Forest City’s residential towers. It is the first of five such plants the company plans in Johor Bahru. Image by Keith Schneider for Mongabay.

From 1988 to 2017, 31 reclamation projects and 18 islands were constructed in Malaysia, according to a paper by Su Yin Chee and colleagues in the October 2017 edition of Global Ecology and Conservation, a New York-based peer-reviewed science journal. Along with Penang Island and Malacca, Su found that Johor is the site of the largest reclamation projects in Malaysia.

The effects of constructing artificial islands on marine ecology in and outside Malaysia are well understood. Scraping sand from one area of the deeper sea and depositing it in shallow near-shore areas makes a mess of seabed grass marshes, mangroves, shell fisheries, commercial fishing grounds and fishing villages. Essentially anything living either gets smothered in drifting sand or chased away by murky waters.

In shoreline communities along Peninsular Malaysia’s west coast, opposition to several big reclamation projects is loud and visible. Fishermen on Penang Island have protested the ongoing construction of big artificial islands on the north shore and a plan to build three reclaimed islands on the south shore that are almost 500 hectares (1,240 acres) larger than Forest City.

Along the Strait of Malacca, south of Penang, fishermen from the historic Portuguese Settlement have been actively opposing the $10 billion Melaka Gateway, which lies alongside their community of 2,000 residents. The Gateway, an installation in China’s Belt and Road Initiative, is a mammoth Chinese-financed and constructed port, cruise terminal, shipyard and mixed-use retail and residential project under construction since 2014 on 15 square kilometers (5.8 square miles) of reclaimed land.

The scale model diorama of Forest City features buildings as tall as a man. Image by Keith Schneider for Mongabay.

Marine mega project

Forest City is being built alongside the largest tidal seagrass bed in Peninsular Malaysia. According to various assessments by academics and government agencies, it is home to at least eight species of seagrass and 30 species of seaweed that support commercial fisheries, and is a habitat for endangered dugongs and turtles.

The watery landscape ties together a web of marine life at the western entrance to the Strait of Johor. Ng Zhu Hann, the strategy head, says Country Garden is exceeding global standards for ensuring the health of the ecosystem. “Our company’s business plan requires it,” he said. “Being clean and close to nature is what we are marketing here.”

In support of that goal, Country Garden installed screens in the sea to both block sand from spreading offshore and reduce murkiness. It removed a causeway that was impeding coastal currents and damaging prawn-harvesting areas. The company cut the development area by 30 percent and established space for planting and managing a 250-hectare (618-acre) seagrass plantation offshore along with 9 kilometers (5.6 miles) of mangroves and 10 kilometers (6.2 miles) of shallow coves and mudflats to support the region’s shell fisheries. It conducts regular water quality monitoring, and spares the Tanjung Kupang seagrass meadow along the Strait of Johor from more damage.

It is too soon to say whether these efforts are enough. Evidence that they could be is emerging just west of Forest City, near the Port of Tanjung Pelepas. The port’s managers completely smothered a large seagrass meadow during an expansion project in 2003. But recent restoration work, coupled with natural regrowth and new pollution control practices, enabled the seagrass bed to fully recover, according to news reports.

That result is familiar to marine scientists who have studied reclamation projects managed with contemporary environmental safeguards. “Whilst many are not supportive of land reclamation and the construction of artiﬁcial islands,” wrote Su Yin Chee and colleagues in their paper for Global Ecology and Conservation, “others (i.e. the developers, state government and, to a certain extent, members of the public) deem these as appropriate planning and long-term management. Eco-engineering represents a valuable adaptive management tool to mitigate the impact of harmful coastal development.”

“The unexpected bonus of the Forest City development is that it has spurred neighboring developers and businesses to work harder at ensuring their environmental credibility,” added Abdul Rahman. “The bad publicity that Forest City got and the increased civil action and eyes on the area have forced the business community to take note and amend their ways. I personally think that’s great because it’s otherwise quite hard to do.”

Prefabricated construction components are trucked about 10 kilometers from Country Garden’s factory to Forest City. The industrial construction strategy costs more but saves time, and reduces waste and energy on and off the construction site. Image by Keith Schneider for Mongabay.

To a large extent, Country Garden had no choice. In marketing Forest City as a model of sustainability, it could not afford to let public pressure, political criticism and media attention weaken demand for its Forest City residences and office space.

For a brief period, Country Garden executives believed they had gained traction in making the case for their giant project, and were making progress on the slippery slope of civic and governmental suspicions. The prime minister’s determination to ban sales to foreign buyers is a signal setback. It came just a year after Chinese authorities restricted how much Chinese consumers, the project’s principal market, could spend on residential purchases outside China. The project’s initial business strategy is being amended, said Ng.

Looking ahead, Forest City’s path to completion is also impeded by one more big obstacle: public attention and pressure. Country Garden’s leaders understand that a social metric lies at the top of the project’s priorities. The company must prove that the eco-friendly image they’ve built for the development is more than just a marketing scheme.